As filed with the Securities and Exchange Commission on March 3, 2000.
- -------------------------------------------------------------------------------
File Nos. 333-50879
811-07351
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 3
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 11
GLENBROOK LIFE AND ANNUITY COMPANY SEPARATE ACCOUNT A
(Exact Name of Registrant)
GLENBROOK LIFE AND ANNUITY COMPANY
(Name of Depositor)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
GLENBROOK LIFE AND ANNUITY COMPANY
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-2400
(Name and Complete Address of Agent for Service)
COPIES TO:
ANTHONY POOLE, ESQUIRE TERRY R. YOUNG, ESQUIRE
ALLSTATE LIFE INSURANCE COMPANY ALLSTATE LIFE FINANCIAL SERVICES, INC.
3100 SANDERS ROAD, SUITE J5B 3100 SANDERS ROAD, SUITEJ5B
NORTHBROOK, ILLINOIS 60062 NORTHBROOK, ILLINOIS 60062
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: CONTINUOUS
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
__ immediately upon filing pursuant to paragraph (b) of Rule 485
__ on (date) pursuant to paragraph (b) of Rule 485
X 60 days after filing pursuant to paragraph (a)(1) of Rule 485
__ on (date) pursuant to paragraph (a)(1) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
__ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
TITLE OF SECURITIES BEING REGISTERED: Units of Interest in the Glenbrook Life
and Annuity Company Separate Account A under Deferred Variable Annuity
Contracts.
<PAGE>
Explanatory Note
Registrant is filing this post-effective amendment ("Amendment") for the sole
purpose of amending the registration statement to reflect (a) the substitution
of a new income benefit option and (b) the substitution of a new income and
death benefit option, both of which Registrant proposes to make available on or
about May 1, 2000 under the contracts described in the registration statement.
The Amendment is not intended to amend or delete any part of the registration
statement, except as specifically noted herein. Prior to May 1, 2000, Registrant
intends to file a subsequent post-effective amendment, including revised
prospectuses and a statement of additional information, that will incorporate
the changes set out in this Amendment.
<PAGE>
PART A
- ------
Each prospectus contained in the registration statement is amended as follows:
1. In the section entitled "The Contract at a Glance," the language contained
in the first bullet under the heading "Expenses" shall be replaced with the
following:
o Total Variable Account annual fees equal to 1.10% of average daily net
assets (1.30% if you select the Enhanced Death Benefit Option or the
Performance Death Benefit Rider if you select the Income Benefit
Combination Option, and 1.60% if you select the Enhanced Death and
Income and Death Benefit Combination Option)
2. The information contained under the heading "Variable Account Annual
Expenses" in the Expense Table shall be replaced with the following:
Mortality and Expense Risk Charge 1.00%*
-------------------------------------------------------
Administrative Expense Charge 0.10%
-------------------------------------------------------
Total Variable Account Annual Expenses 1.10%
-------------------------------------------------------
* If you select the Enhanced Death Benefit Option, the mortality
and expense risk charge is 1.30%. If you select the Enhanced
Death and Income Benefit Combination Rider, the mortality and
expense risk charge is 1.60%.
3. The examples following the Expense Table shall include the following charts
(to be completed by amendment):
(With Optional Income Benefit Combination Provision )
Name of Sub-Account 1 Year 3 Years 5 Years 10 Years
------------------- ------ ------- ------- --------
(With Optional Income and Death Benefit Combination Provision )
Name of Sub-Account 1 Year 3 Years 5 Years 10 Years
------------------- ------ ------- ------- --------
The language following Example 2 shall be replaced with the following:
Please remember that you are looking at examples and not a
representation of past or future earnings. Your actual expenses
may be lower or greater than those shown above. Similarly, your
rate of return may be lower or greater than 5%, which is not
guaranteed. The above examples assume the election of the
Enhanced Death and Income Benefit Combination Rider with a
mortality and expense risk charge of 1.60%. If that Rider were
not elected, the expense figures shown above would be slightly
lower. To reflect the contract maintenance charge in the
examples, we estimated an equivalent percentage charge, based on
the current average Contract size of $47,490.
4. The section entitled "Mortality and Expense Risk Charge" shall be replaced
with the following:
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.00%
of the daily net assets you have invested in the Variable Sub-Accounts (1.20% if
you select the Enhanced Death Benefit Rider, and 1.60% if you select the
Enhanced Death and Income Benefit Combination Rider). The mortality and expense
risk charge is for all the insurance benefits available with your Contract
(including our guarantee of annuity rates and the death benefits), for certain
expenses of the Contract, and for assuming the risk (expense risk) that the
current charges will be sufficient in the future to cover the cost of
administering the Contract. If the charges under the Contract are not
sufficient, then we will bear the loss. We charge an additional amount for the
Enhanced Death Benefit Rider and the Enhanced Death and Income Benefit
Combination Rider to compensate us for the additional risk that we accept by
providing these options.
We guarantee that we will not raise the mortality and expense charge. We assess
the mortality and expense risk charge during both the Accumulation Phase and the
Payout Phase.
5. The section entitled "Enhanced Death Benefit" shall be replaced with
the following:
Enhanced Death Benefit
Enhanced Death Benefit Rider
If the Contract owner is a living individual, the enhanced death benefit applies
only for the death of the Contract owner. If the Contract owner is not a living
individual, the enhanced death benefit applies only for the death of the
Annuitant. For Contracts with the Enhanced Death Benefit Rider, the death
benefit will be the greatest of (1) through (4) above, or (5) the enhanced death
benefit. The enhanced death benefit is equal to the greater of the Enhanced
Death Benefit A or Enhanced Death Benefit B. Enhanced Death Benefit B may not be
available in all states.
That enhanced death benefit will never be greater than the maximum death benefit
allowed by any nonforfeiture laws that govern the Contract.
Enhanced Death Benefit A. At issue, Enhanced Death Benefit A is equal to the
initial purchase payment. After issue, Enhanced Death Benefit A is the greatest
of the Anniversary Values as of the date we determine the death benefit. The
"Anniversary Value" is equal to the Contract Value on a Contract Anniversary,
increased by purchase payments made since that Anniversary and reduced by an
adjustment for any partial withdrawals since that Anniversary. The adjustment is
equal to (a) divided by (b), and the result multiplied by (c) where:
(a) is the withdrawal amount,
(b) is the Contract Value immediately prior to the withdrawal, and
(c) is the Contract Value on that Contract Anniversary adjusted by
any prior purchase payments and withdrawals since that Contract
Anniversary.
We will calculate Anniversary Values for each Contract Anniversary prior to the
oldest Contract owner's or the Annuitant's, if the Contract owner is not a
natural person, 80th birthday.
Enhanced Death Benefit B. The Enhanced Death Benefit B is equal to total
purchase payments made reduced by a withdrawal adjustment, as defined below.
Each purchase payment and each withdrawal adjustment will accumulate daily at a
rate equivalent to 5% per year until the earlier of:
o the date we determine the death benefit, or
o the first day of the month following the oldest Contract owner's or,
if the Contract owner is not a natural person, the Annuitant's, 85th
birthday.
The adjustment is equal to (a) divided by (b), and the result
multiplied by (c) where:
(a) the withdrawal amount,
(b) is the Contract Value immediately prior to the withdrawal, and
(c) is the most recently calculated enhanced death benefit.
The Enhanced Death Benefit B will never be greater than the maximum death
benefit allowed by any non-forfeiture laws which govern the Contract.
6. The section entitled "Enhanced Death and Income Benefit Combination Rider"
shall be replaced with the following:
Enhanced Death and Income Benefit Combination Rider
You may elect not to choose the Enhanced Death Benefit Rider and may instead
choose the Enhanced Death and Income Benefit Combination Rider.
The enhanced death benefit portion of the Enhanced Death and Income Benefit
Combination Rider is as described above under "Enhanced Death Benefit Rider
Enhanced Death Benefit B."
The enhanced income benefit defines a minimum amount applied to the Payout
Phase. This minimum amount is equal to the value the enhanced death benefit
would be on the Payout Start Date.
To exercise your enhanced income benefit, you must apply it to an Income
Plan. The Payout Start Date you select must begin on or after the tenth
anniversary of the Rider Date, and within 30 days after a Contract
Anniversary. No Market Value Adjustment will be applied to the enhanced
incomed benefit amount. In addition, you must apply your enhanced income
benefit to an Income Plan that provides guaranteed payments for either a
single or joint life for at least:
1. 10 years, if the youngest Annuitant's age is 90 or less on the date
you apply the Benefit, or
2. 5 years, if the youngest Annuitant's age is greater than 90 on the
date you apply the Benefit.
If your current Contract Value is higher than the Performance
Income Benefit, you can apply the Contract Value to any Income
Plan. The Income Benefit Combination Option may not be available
in all states.
Income Base
The Income Base is the greater of Income Base A or Income Base B.
Income Base is used solely for the purpose of calculating the
Guaranteed Income Benefit and does not provide a Contract Value
or guarantee performance of any investment option.
<PAGE>
Income Base A
o On the Rider Date, Income Base A is equal to the Contract Value
o After the Rider Date, Income Base A is recalculated as follows on the
Contract Anniversary and when a purchase payment or withdrawal is made
o For purchase payments, Income Base A is equal to the most recently
calculated Income Base A plus the purchase payment
o For withdrawals, Income Base A is equal to the most recently calculated
Income Base A reduced by a withdrawal adjustment (described below)
o On each Contract Anniversary, Income Base A is equal to the greater of the
Contract Value or the most recently calculated Income Base A.
In the absence of any withdrawals or purchase payments, Income Base A will
be the greatest of the Contract Value on the Rider Date and all Contract
Anniversary Contract Values between the Rider Date and the Payout Start
Date.
We will recalculate Income Base A as described above until the first
Contract Anniversary after the 85th birthday of the oldest Contract owner
or Annuitant (if the Contract owner is not a natural person). After age 85,
we will only recalculate the Performance Income Benefit to reflect
additional purchase payments and withdrawals.
Income Base B
On the Rider Date, Income Base B is equal to the Contract Value. After the
Rider Date, Income Base B plus any subsequent purchase payments and less a
withdrawal adjustment (described below) for any subsequent withdrawals will
accumulate daily at a rate equivalent to 5% per year until the first
Contract Anniversary after the 85th birthday of the oldest owner or
Annuitant (if the Contract owner is not a natural person).
Withdrawal Adjustment
The adjustment is equal to (1) divided by (2), with the result multiplied
by (3) where:
(1) = the withdrawal amount
(2) = the Contract Value
(3) = the most recently calculated Income Base
Guaranteed Income Benefit
The guaranteed income benefit amount is determined by applying the Income
Base less any applicable taxes to the guaranteed rates for the Income Plan
you elect. The Income Plan you elect must satisfy the conditions described
above.
A claim for a distribution on death must include "Due Proof of Death." We will
accept the following documentation as Due Proof of Death:
o a certified copy of a death certificate; or
o a certified copy of a decree of a court of competent jurisdiction as
to a finding of death; or
o any other proof acceptable to us.
PART B
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The statement of additional information contained in the registration statement
is amended as follows:
1. The tables in the sections entitled "Standardized Total Returns" and
"Non-Standardized Total Returns" shall be deleted and replaced with the
following tables(to be completed by amendment):
(WITHOUT THE ENHANCED DEATH BENEFIT OPTION OR THE ENHANCED DEATH AND INCOME
BENEFIT COMBINATION OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
(WITH THE ENHANCED DEATH BENEFIT OPTION)*
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
(WITH THE ENHANCED DEATH AND INCOME BENEFIT COMBINATION OPTION)*
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
2. The tables in the section entitled "Adjusted Historical Total Returns"
shall be deleted and replaced with the following tables(to be completed by
amendment):
(WITHOUT THE ENHANCED DEATH BENEFIT OPTION OR THE ENHANCED DEATH AND INCOME
BENEFIT COMBINATION OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
(WITH THE ENHANCED DEATH BENEFIT OPTION)*
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
(WITH THE ENHANCED DEATH AND INCOME BENEFIT OPTION)*
10 Years or
Variable Sub-Account One Year Five Years Since Inception
--------------------------------------------------
<PAGE>
PART C
Part C is hereby amended to include the following exhibits:
Item 24(b). EXHIBITS
(4) Form of Contract Riders
Form of Contract Amendment
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement, as amended, to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the Township of Northfield, State of
Illinois, on the 2nd day of March, 2000.
GLENBROOK LIFE AND ANNUITY COMPANY SEPARATE ACCOUNT A
(REGISTRANT)
BY: GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
(SEAL)
By: /s/MICHAEL J. VELOTTA
--------------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this Registration Statement, as
amended, has been duly signed below by the following Directors and Officers of
Glenbrook Life and Annuity Company on the 2nd day of March, 2000.
*/THOMAS J. WILSON, II President and Chief Operating Officer
- ----------------------
Thomas J. Wilson, II
/s/MICHAEL J. VELOTTA Vice President, Secretary, General Counsel
- ---------------------- and Director
Michael J. Velotta
*/JOHN R. HUNTER Vice President and Director
- ----------------
John R. Hunter
*/KEVIN R. SLAWIN Vice President and Director
- ------------------ (Principal Financial Officer)
Kevin R. Slawin
*/CASEY J. SYLLA Chief Investment Officer and Director
- -----------------
Casey J. Sylla
*/SAMUEL H. PILCH Controller
- ---------------------- (Principal Accounting Officer)
Samuel H. Pilch
*/ By Michael J. Velotta, pursuant to Power of Attorney, previously filed.
<PAGE>
EXHIBIT LIST
The following exhibit is filed herewith:
EXHIBIT NO. DESCRIPTION
(4) Form of Contract Riders
Form of Contract Amendment
GLA109 Page 4 (2/00)
GLENBROOK LIFE AND ANNUITY COMPANY
(herein called "we" or "us")
Amendment to Master Policy for Enhanced Death and Income Benefit Combination
Rider II
The Enhanced Death and Income Benefit Combination Rider, if selected, effects
the following changes to the Owner's Contract:
As used in this rider, "Contract" means the Contract or Certificate to which
this rider is attached.
For purposes of this benefit "Rider Date" is the date the Enhanced Death and
Income Benefit Combination rider was made a part of the Owner's Contract.
The following provision is added to the Master Policy.
Enhanced Death Benefit The following is added to the Death Benefit provision.
If the Owner is a living individual, the Enhanced Death Benefit applies only to
the death of the Owner. If the Owner is not a living individual, the Enhanced
Death Benefit applies only to the death of the annuitant.
The Death Benefit will be the greater of the values stated in the Contract, or
the value of the Enhanced Death Benefit.
The Enhanced Death Benefit is equal to the greater of the Enhanced Death Benefit
A or Enhanced Death Benefit B. The Enhanced Death Benefit and the Enhanced
Income Benefit will cease on the date we determine the value of the Death
Benefit.
Enhanced Death Benefit A
After the Rider Date, the Enhanced Death Benefit A is equal to the initial
purchase payment. After the Rider Date, the Enhanced Death Benefit A is
recalculated when a purchase payment or withdrawal is made or on a Contract
anniversary as follows:
1. For purchase payments, the Enhanced Death Benefit A is equal to the
most recently calculated Enhanced Death Benefit A plus the purchase
payment.
2. For withdrawals, the Enhanced Death Benefit A is equal to the most
recently calculated Enhanced Death Benefit A reduced by a withdrawal
adjustment defined below.
3. On each Contract anniversary, the Enhanced Death Benefit A is equal to
the greater of the Contract Value or the most recently calculated
Enhanced Death Benefit A.
In the absence of any withdrawals or purchase payments, the Enhanced Death
Benefit A will be the greatest of all Contract anniversary Contract Values
on or prior to the date we calculate the Death Benefit.
The Enhanced Death Benefit A will be recalculated for purchase payments,
withdrawals and on Contract anniversaries until the oldest Owner or the
annuitant, if the Owner is not a living individual, attains age 85.
<PAGE>
After age 85, the Enhanced Death Benefit A will be recalculated only for
purchase payments and withdrawals.
Enhanced Death Benefit B
The Enhanced Death Benefit B is equal to total purchase payments made
reduced by a withdrawal adjustment. Each purchase payment and each
withdrawal adjustment will accumulate daily at a rate equivalent to 5% per
year until the earlier of:
1. the date we determine the Death Benefit, or
2. the first day of the month following the oldest Owner's or, if the
Owner is not a living individual, the annuitant's 85th birthday.
The Enhanced Death Benefit B will never be greater than the maximum death
benefit allowed by any nonforfeiture laws which govern the Contract.
Withdrawal Adjustment
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Contract Value immediately prior to the withdrawal.
(c) = the most recently calculated Enhanced Death Benefit A or B,
as applicable.
Enhanced Income Benefit The following is added to the Payout Phase Section.
Qualifications
On the Payout Start Date, the Owner may choose to receive income payments
defined in the Enhanced Income Benefit provision if all of the following
conditions are met.
o The Owner elects a Payout Start Date that is on or after the tenth
anniversary of the Rider Date;
o The Payout Start Date occurs during the 30 day period following a Contract
anniversary;
o The Income Base is applied to Fixed Amount Income Payments; and
o The selected Income Plan provides payments guaranteed for either single or
joint life with a period certain of at least:
o 10 years, if the youngest Annuitant's age is 80 or less on the date the
amount is applied, or
o 5 years, if the youngest Annuitant's age is greater than 80 on the date the
amount is applied.
Throughout the PAYOUT PHASE section of your contract, the term "Contract
Value' is replaced with "the greater of the Contract Value or the Enhanced
Income Benefit"; however, no Market Adjustment will be applied to the
Enhanced Income Benefit Amount.
Income Base
The Income Base is the greater of Income Base A or Income Base B.
Income Base is used solely for the purpose of calculating the Guaranteed Income
Benefit and does not provide a Contract Value or guarantee performance of any
investment option.
<PAGE>
Income Base A
o On the Rider Date, Income Base A is equal to the Contract Value.
o After the Rider Date, Income Base A is recalculated as follows on the
Contract anniversary and when a purchase payment or withdrawal is made.
o For purchase payments, Income Base A is equal to the most recently
calculated Income Base plus the purchase payment.
o For withdrawals, Income Base A is equal to the most recently calculated
Income Base reduced by a withdrawal adjustment.
o On each Contract anniversary, Income Base A is equal to the greater of the
Contract Value or the most recently calculated Income Base A.
In the absence of any withdrawals or purchase payments, Income Base A will
be the greatest of the Contract Value on the Rider Date and all Contract
anniversary Contract Values between the Rider Date and the Payout Start
Date.
Income Base A will be recalculated for purchase payments, for withdrawals
and on Contract anniversaries until the first Contract anniversary after
the 85th birthday of the oldest Owner or, if no Owner is a living
individual, the Annuitant.
After that date, Income Base A will be recalculated only for purchase
payments and withdrawals.
Income Base B
On the Rider Date, Income Base B is equal to the Contract Value. After the
Rider Date, Income Base B plus any subsequent purchase payments and less a
withdrawal adjustment for any subsequent withdrawals, will accumulate daily
at a rate equivalent to 5% per year. The accumulation will continue until
the first Contract anniversary after the 85th birthday of the oldest Owner
or, if the Owner is not a living individual, the oldest Annuitant.
Withdrawal Adjustment
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Contract Value immediately prior to the withdrawal.
(c) = the most recently calculated Income Base.
Guaranteed Income Benefit
The Guaranteed Income Benefit amount is determined by applying the Income Base
less any applicable taxes to the guaranteed rates for the Income Plan elected by
the Owner. The Income Plan selected must satisfy the conditions defined in
Qualifications above. The rates are the guaranteed rates defined in the Income
Payment Tables section for either a single or joint life with a period certain.
On the Payout Start Date, the income payment will be the greater of the
Guaranteed Income Benefit and the income payment provided in the Payout Phase
section.
Mortality and Expense Risk Charge The Mortality and Expense Risk Charge
provision is modified as follows:
<PAGE>
The annualized Mortality and Expense Risk Charge is increased by 0.50%
After the death of the Owner, if the surviving spouse elects to continue the
Contract in the Accumulation Phase, then the annualized Mortality and Expense
Risk Charge will be reduced by 0.50%. The effective date of this change will be
the date we determine the value of the Death Benefit.
Michael J. Velotta Thomas J. Wilson
Secretary Chairman and Chief Executive Officer
<PAGE>
Page 4
GLA110 (2/00)
GLENBROOK LIFE AND ANNUITY COMPANY
(herein called "we" or "us")
Enhanced Death and Income Benefit Combination Rider II
This rider was issued because you selected the Enhanced Death Benefit and the
Enhanced Income Benefit.
As used in this rider, "Contract" means the Contract or Certificate to which
this rider is attached.
For purposes of this rider, "Rider Date" is the date this rider was made a part
of your Contract: xx/xx/xxxx
Enhanced Death Benefit The Death Benefit provision of your Contract is modified
by adding the following:
If the Owner is a living individual, the Enhanced Death Benefit applies only to
the death of the Owner. If the Owner is not a living individual, the Enhanced
Death Benefit applies only to the death of the annuitant.
The Death Benefit will be the greater of the values stated in your Contract, or
the value of the Enhanced Death Benefit.
The Enhanced Death Benefit is equal to the greater of the Enhanced Death Benefit
A or Enhanced Death Benefit B. The Enhanced Death Benefit and the Enhanced
Income Benefit will cease on the date we determine the value of the Death
Benefit.
Enhanced Death Benefit A
After the Rider Date, the Enhanced Death Benefit A is equal to the initial
purchase payment. After the Rider Date, the Enhanced Death Benefit A is
recalculated when a purchase payment or withdrawal is made or on a Contract
anniversary as follows:
1. For purchase payments, the Enhanced Death Benefit A is equal to the
most recently calculated Enhanced Death Benefit A plus the purchase
payment.
2. For withdrawals, the Enhanced Death Benefit A is equal to the most
recently calculated Enhanced Death Benefit A reduced by a withdrawal
adjustment defined below.
3. On each Contract anniversary, the Enhanced Death Benefit A is equal to
the greater of the Contract Value or the most recently calculated
Enhanced Death Benefit A.
In the absence of any withdrawals or purchase payments, the Enhanced
Death Benefit A will be the greatest of all Contract anniversary
Contract Values on or prior to the date we calculate the Death
Benefit.
The Enhanced Death Benefit A will be recalculated for purchase
payments, withdrawals and on Contract Anniversaries until the oldest
Owner or the annuitant, if the Owner is not a living individual,
attains age 85.
After age 85, the Enhanced Death Benefit A will be recalculated only for
purchase payments and withdrawals.
Enhanced Death Benefit B
<PAGE>
The Enhanced Death Benefit B is equal to total purchase payments made
reduced by a withdrawal adjustment. Each purchase payment and each
withdrawal adjustment will accumulate daily at a rate equivalent to 5% per
year until the earlier of:
1. the date we determine the Death Benefit, or
2. the first day of the month following the oldest Owner's or, if
the Owner is not a living individual, the annuitant's 85th
birthday.
The Enhanced Death Benefit B will never be greater than the maximum death
benefit allowed by any nonforfeiture laws which govern the Contract.
Withdrawal Adjustment
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Contract Value immediately prior to the withdrawal.
(c) = the most recently calculated Enhanced Death Benefit A or B,
as applicable.
Enhanced Income Benefit The following is added to your Contract.
Qualifications
On the Payout Start Date, the Owner may choose to receive income payments
defined in the Enhanced Income Benefit provision if all of the following
conditions are met.
o The Owner elects a Payout Start Date that is on or after the tenth
anniversary of the Rider Date;
o The Payout Start Date occurs during the 30 day period following a Contract
anniversary;
o The Income Base is applied to Fixed Amount Income Payments; and
o The selected Income Plan provides payments guaranteed for either single or
joint life with a period certain of at least:
o 10 years, if the youngest Annuitant's age is 80 or less on the date the
amount is applied, or
o 5 years, if the youngest Annuitant's age is greater than 80 on the date the
amount is applied.
Throughout the PAYOUT PHASE section of your Contract, the term "Contract
Value" is replaced with "the greater of the Contract Value or the Enhanced
Income Benefit"; however, no Market Value Adjustment will be applied to the
Enhanced Income Benefit amount.
Income Base
The Income Base is the greater of Income Base A or Income Base B.
Income Base is used solely for the purpose of calculating the Guaranteed Income
Benefit and does not provide a Contract Value or guarantee performance of any
investment option.
Income Base A
o On the Rider Date, Income Base A is equal to the Contract Value. o
<PAGE>
o After the Rider Date, Income Base A is recalculated as follows on the
Contract anniversary and when a purchase payment or withdrawal is made.
o For purchase payments, Income Base A is equal to the most recently
calculated Income Base plus the purchase payment.
o For withdrawals, Income Base A is equal to the most recently calculated
Income Base reduced by a withdrawal adjustment.
o On each Contract anniversary, Income Base A is equal to the greater of the
Contract Value or the most recently calculated Income Base A.
In the absence of any withdrawals or purchase payments, Income Base A will
be the greatest of the Contract Value on the Rider Date and all Contract
anniversary Contract Values between the Rider Date and the Payout Start
Date.
Income Base A will be recalculated for purchase payments, for withdrawals
and on Contract anniversaries until the first Contract anniversary after
the 85th birthday of the oldest Owner or, of no Owner is a living
individual, the Annuitant.
After that date, Income Base A will be recalculated only for purchase
payments and withdrawals.
Income Base B
On the Rider Date, Income Base B is equal to the Contract Value. After the
Rider Date, Income Base B Plus any subsequent purchase payments and less a
withdrawal adjustment for any subsequent withdrawals, will accumulate daily
at a rate equivalent to 5% per year. The accumulation will continue until
the first Contract anniversary after the 85th birthday of the oldest Owner
or, if the Owner is not a living individual, the oldest Annuitant.
Withdrawal Adjustment
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Contract Value immediately prior to the withdrawal.
(c) = the most recently calculated Income Base.
Guaranteed Income Benefit
The Guaranteed Income Benefit amount is determined by applying the Income Base
less any applicable taxes to the guaranteed rates for the Income Plan elected by
the Owner. The Income Plan selected must satisfy the conditions defined in
Qualifications above. The rates are the guaranteed rates defined in the Income
Payment Tables section of the Contract for either a single or joint life with a
period certain.
On the Payout Start Date, the income payment will be the greater of the
Guaranteed Income Benefit and the income payment provided in the Fixed Amount
Income Payments provision of the Contract.
Mortality and Expense Risk Charge The Mortality and Expense Risk Charge
provision of your Contract is modified as follows:
The annualized Mortality and Expense Risk Charge is increased by 0.50%.
<PAGE>
After the death of the Owner, if the surviving spouse elects to continue the
Contract in the Accumulation phase, then the annualized Mortality and Expense
Risk Charge will be reduced by 0.50%. The effective date of this charge will be
the date we determine the value of the Death Benefit.
Michael J. Velotta Thomas J. Wilson
Secretary Chairman and Chief Executive Officer
